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- Coinbase scraps Turkey plans, wants to dump AML laws
The Coinbase (NASDAQ: COIN) exchange has hit reverse on its Turkey licensing plans for as-yet unexplained reasons, while its increasingly cocksure CEO thinks crypto firms shouldn’t be subject to anti-money laundering (AML) laws.
On December 1, Turkish media reported that Coinbase had withdrawn its ‘pre-application’ to serve local customers with the local government’s permission. Coinbase also requested the liquidation of its Turkish subsidiary, Coinbase Turkey Yazılım Teknolojileri AŞ. The company played coy with its reasoning, saying only that it “remains adaptive to evolving market conditions, regulatory landscapes and our internal priorities.”
Coinbase filed its paperwork in August, one of 47 digital asset operators originally seeking to be licensed as a Turkish virtual asset service provider (VASP). That number has since grown to 77, while the number seeking liquidation stands at 14.
Coinbase’s abrupt disinterest in legally serving Turkish customers doesn’t square with the market’s enthusiastic adoption of digital assets, spurred in part by fears of devaluation of the local currency. In fact, Turkey tops all other digital asset markets in the Middle East and North Africa (MENA) region and ranks 11th globally.
But it wouldn’t be the first time that a major crypto firm has loudly insisted that all it wants for Christmas is ‘regulatory clarity,’ you know, just some clear rules of the road so it doesn’t total this Lambo. But all too often, once those rules are provided, the reaction from these firms is to walk away grumbling about how unfair crypto is treated.
Turkey is not a European Union member state, although it is part of the European Economic Area (EEA). As such, there is a desire by Turkish regulators to achieve some parity with the EU’s Markets in Crypto Assets (MiCA) regulations, which digital asset operators in EEA markets will have to observe by year’s end.
Last week, Coinbase cited MiCA’s constraints in alerts sent to its EU customers, informing them that the exchange was halting their ability to earn rewards (interest) by staking the USDC stablecoin—issued by Circle in a partnership with Coinbase—as of December 1.
USDC and its Euro-denominated counterpart, EURC, became the first stablecoins to be approved under MiCA this summer. In October, Coinbase announced it would delist all non-approved stablecoins from its European-facing platform by December 30, including Tether’s USDT, the largest stablecoin by market cap.
Choke on your lies!
Coinbase CEO Brian Armstrong is one of the high-profile crypto execs currently playing the world’s tiniest violins while lamenting the shoddy treatment their firms allegedly receive at the hands of America’s banks. The ‘debanking’ conspiracy theory known as ChokePoint 2.0 is based on an alleged government-directed move that painted a scarlet financial letter on crypto firms and their investors.
In response to the ‘Chokepoint’ allegations made last week by technology venture capitalist Marc Andreessen (a16z) on Joe Rogan’s podcast, Armstrong tweeted that he could “confirm this is true.” Armstrong also accused outgoing Securities and Exchange Commission (SEC) chair Gary Gensler and Sen. Elizabeth Warren (D-MA) of trying to “unlawfully kill our entire industry.” Armstrong warned the Democratic party to “further distance themselves” from this felonious duo “if they want to have any hope of rebuilding” after last month’s electoral shellacking.
We pause here to note the irony of Armstrong talking about financial firms offering opaque explanations for denying access to financial services/resources. It recalls the legions of frustrated Coinbase customers who flood subreddits with complaints about the exchange cutting them off from their accounts (and the assets therein) with only the most threadbare explanations as to why.
This week, angel investor/EthHub founder Eric Conner tweeted his dismay at Coinbase locking his account “for security reasons” after he tried to transfer $25,000 worth of USDC. Other Coinbase customers chimed in to recount their own tales of freezing/locking woe, while Conner suggested his problem was due to his use of a virtual private network (VPN) during the transfer.
The following day, Coinbase product designer Scott Shapiro confirmed Conner’s suspicions, saying the exchange’s “risk models take [using a VPN] as a negative sign even if you’re legitimately using your own account.” Shapiro said the same applied for “ad blockers and other extensions,” which prompted eye rolls from customers—and some Coinbase competitors—who pointed out that ‘crypto’ fans tend to be mildly obsessive about their online privacy.
Brian wants to be the Mr. Clean of money laundering
Armstrong appears to have come up with a solution for his company’s freewheeling freezing policies: stop doing KYC/AML checks.
As part of his debanking diatribe, Armstrong declared that AML regulations “have been a policy failure.” Armstrong cited the cost of monitoring transactions compared with the amount of illicit activity they prevent, plus the fact that they can “harm legitimate consumers (as we’ve seen with these de-banking stories).”
(We know what you cynics are thinking: that’s just what someone who heads a company that has been fined over $100 million in the U.S. and the U.K. for shoddy attention to KYC/AML requirements and opening up Coinbase to “fraud, possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking.”)
Armstrong went on to suggest that Elon Musk’s new non-departmental Department of Government Efficiency (D.O.G.E.) might want to look at doing something about this. Like, um, declaring that KYC/AML is hard and costly and so maybe crypto bros shouldn’t have to do it?
Even as he praised Musk’s ‘efficiency’ efforts, Armstrong suggested that Congress should be required to re-approve “all laws” every 5-10 years, just to be sure they’re not taking a bite out of crypto operators’ bottom line. Yes, we can’t imagine a better solution to an already inefficient legislature than requiring them to pause a couple of times each decade to debate whether murder, rape, and grand theft crypto are still, you know, bad.
Brian Ozymandistrong
Armstrong appears to believe he’s now in a position to simply order Congress what to do, having been one of the prime movers behind Fairshake and some other crypto-focused political action committees that spent over $130 million to elect ‘the most pro-crypto Congress ever’ last month. Armstrong has publicly committed another $25 million for use in the 2026 mid-term elections, in case anyone dares not give this glabrous crypto titan everything he demands.
On December 2, Armstrong issued a warning in response to news that the high-priced law firm Milbank LLP had hired former SEC enforcement director Gurbir Grewal, who left the agency on October 11. Grewal was the point person for much of the SEC’s crypto-focused litigation, including the SEC’s ongoing suit against Coinbase.
Armstrong tweeted that Coinbase “don’t work with [Milbank] now (and never will while [Grewal] works there).” Coinbase has “let all the law firms we work with know, that if they hire anyone who committed these bad deeds in the (soon to be) prior administration, we will no longer be a client of theirs.” Armstrong urged other crypto firms to issue similar ultimatums to law firms on their payrolls.
Tune in next week, when Armstrong buys himself a slot in next year’s Super Bowl halftime show, reforms his high school band, and offers the world a screechy version of Screaming for Vengeance .
Cryptocrite
The ‘why is everybody always picking on us’ ChokePoint 2.0 chorus was roundly mocked online (fun examples here, here, here, and here). Some of the more biting ones include the reminder that, despite all its ‘world-beating’ technological braggadocio, “crypto isn’t a parallel financial system. It doesn’t work without conversion to legal tender, “aka “crypto isn’t viable without access to/from US dollars.”
CoinGeek’s Kurt Wuckert Jr. recently called Andreessen a hypocrite, citing the latter’s support for Democrats, while the original ChokePoint—launched under President Obama—targeted firms in which Andreessen wasn’t invested. Wuckert also took issue with a16z’s decisions to invest in so many ‘crypto’ projects that did little more than make big promises and issue tokens.
These same tokens were flogged on exchanges like Coinbase—on whose board Andreessen sits—until everyone realized those projects’ promises were little more than hot air. And yet Coinbase continues to list more of these utility-free digital Beanie Babies, including Dogwifhat, Pepe, Floki, and Moo Deng, because a crypto casino always needs shiny new chips to entice the rubes.
Meanwhile, Coinbase never listed BSV despite the BSV blockchain’s ongoing efforts to bring some sorely needed utility to the blockchain space. Nearly two years ago, Armstrong was blaming the digital asset sector’s lack of mainstream popularity on blockchains’ inability to scale to meet the needs of a billion users. BSV is further along its scaling roadmap than any other blockchain, so Coinbase’s ongoing snub of BSV only underscores the hollowness of Armstrong’s complaints.
Perhaps if BSV added a cartoon character or floppy-eared canine as a mascot, maybe changed its name to BSVforVendetta or something, Armstrong and his crypto casino croupiers might take notice. But until they do, pay no more attention to their tales of being ‘choked’ out.
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